10 Common Reasons Why Startups Fail
Most people aspire to have their own startup one day. A startup that will be a revolution and bring about a revolution. But according to the statistics, 90% of Startups in India don’t survive the initial 5 years from the day of their inception. It is however crucial to note that there is a pattern why startups fail. We have listed a few important yet common reasons why startups in India Fail.
1. Not Enough Market Research
This might come across as a shock but the key ingredient to a good startup is the product or idea. Which therefore requires a solid amount of market research. Also, the idea or product needs to meet the requirement of the market. Even if your idea or product is revolutionary but there is no need for it in the market currently, your startup can tend to fail. Therefore it is absolutely necessary that you have a firm grasp on the market research.
2. Financial Insufficiency
A great idea or product needs economic resources at its disposal. New business ventures require sufficient time and money. Some businesses require more funds and also additional funding. If your business is unable to generate funds and additional funding, that might be the reason why your startup is crumbling. There is no absolute answer to the question, how much funds does a startup require?
3. Disharmony
United we stand, divided we fall. We have heard this ample times. If your teammates are not on the same boat, things can get real messy, real soon. Therefore it is necessary that you resolve any sort of conflict for a smooth sailing. Same goes for the investors. It is important that you keep your investors on the loop. Make it an agenda that you and your investors remain on the same page for the smooth flow of the startup.
4. Careful With The Competition
Yes there is a cut throat competition in the market among the rivals out there. But startups should not be majorly concerned with it. There are other things to focus on before coming to the competition. We’re not saying ignore the competition completely but don’t obsess over it either. It is critical that you establish yourself first before getting your hands dirty.
5. Pricing
Your first step towards success is getting customers first. And who likes high prices, right?? Hence, you have to price your products carefully. A startup might fail if the prices are too high. Also you need to keep researching methods through which you can provide your product in a lower price range. If the price is high, there must be a genuine reason if you don’t want your customers to complain about the price.
6. Ignoring Customer Needs
You need to give importance to what the customers have to say about your product. You need to meet their demands and needs. For the startup to survive, establishing a good relationship with the customers is important. The feedback should be taken seriously and you should continuously keep researching and coming up with new spunk. Once the business gets stagnant, so does the customer base. Getting feedback from users from time to time across stages of product development and testing does not let a company down. It will in fact get customers hooked on to the next iterations of the products and services.
7. No Proper Business Model
Entrepreneurs tend to believe that building the product, acquiring customers, website, marketing and sales is an easy task. This notion is as misleading as it can get. All of these things are not possible if your business model is dynamic.
8. Poor Marketing
If a company fails to market the product successfully then chances are that the business might not flourish. Marketing your product and acquiring customers is a basic skill without which the startup might not succeed. A business should target a specific audience to get their business running.
9. Lack of Passion and Motivation
Having a marketable idea or product is not enough. You need to show passion and keep reinventing so that you establish a place for yourself in the market. You need to be motivated throughout the process. Lack of knowledge regarding the product is the main reason for losing passion. This ensures that the business doesn’t sustain. So buck up.
10. Legal Challenges
Sometimes, a startup might get strangled with legal complexities and this can be the cause of failure. It could be anything such as the suspension of an affiliate account generating maximum revenue or the inability to launch on a global scale.
Well, these are the top reasons for the failure of startups. Besides these, there are other reasons including failure to pivot, cash burnout, lack of use of the network, no investors on board, etc.
Also read Business Ideas During Holi
Sonal Singh
Hello, I'm Sonal Singh. hope you liked the article. do comment below and let me know what you thought about it.
